Analysts at Bernstein have expressed a bullish outlook on stablecoin issuer Circle, suggesting that a new growth cycle for the USDC stablecoin could significantly boost the company over the coming year.
In a research note published Monday, Bernstein reported that USDC is exhibiting signs of "digital dollar reflation." The stablecoin's supply recently increased by approximately $2 billion over a seven-day period, breaking a six-month trend of flat or declining growth. Bernstein maintained its Outperform rating on Circle and a $140 price target, alongside noting that Circle shares have climbed roughly 40% over the past month.
According to Bernstein, the upcoming phase of stablecoin expansion could be propelled by several key drivers, including renewed momentum across crypto markets, increased regulatory clarity in the United States, tokenized capital markets, and expanding adoption for payments. The analysts additionally highlighted early indications of stablecoin utilization in transactions executed by artificial intelligence agents.
While USDC holds its position as the second-largest dollar-backed stablecoin by market capitalization behind Tether's USDt, it has outpaced its competitor in transaction activity. Bernstein noted that USDC's share of adjusted stablecoin transaction volume increased from approximately 40% in 2025 to over 60% in 2026, surpassing USDt by that specific metric.
Circle's stock has seen substantial volatility since the company completed its initial public offering in June 2025, where it priced shares at $31 and raised about $1.1 billion. Following an initial post-debut surge, the stock declined toward its IPO price by November 2025 amid a broader downturn in the crypto market. In its most recent financial quarter, Circle posted $701 million in revenue and $48 million in net income, both representing increases compared to the previous year.
